Trade-Ideas LLC identified Schnitzer Steel Industries ( SCHN) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Schnitzer Steel Industries as such a stock due to the following factors:

  • SCHN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $7.2 million.
  • SCHN has traded 135,425 shares today.
  • SCHN is trading at 9.73 times the normal volume for the stock at this time of day.
  • SCHN is trading at a new low 11.15% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on SCHN:

Schnitzer Steel Industries, Inc. recycles ferrous and nonferrous scrap metals; and manufactures finished steel products worldwide. It operates through two segments, Auto and Metals Recycling (AMR) and Steel Manufacturing Business (SMB). The stock currently has a dividend yield of 4.1%. Currently there are no analysts that rate Schnitzer Steel Industries a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Schnitzer Steel Industries has been 405,300 shares per day over the past 30 days. Schnitzer has a market cap of $493.1 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.78 and a short float of 9.3% with 5.74 days to cover. Shares are up 31% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Schnitzer Steel Industries as a hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 78.9% when compared to the same quarter one year prior, rising from -$195.64 million to -$41.25 million.
  • SCHNITZER STEEL INDS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SCHNITZER STEEL INDS swung to a loss, reporting -$7.04 versus $0.33 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$7.04).
  • The gross profit margin for SCHNITZER STEEL INDS is rather low; currently it is at 15.06%. Regardless of SCHN's low profit margin, it has managed to increase from the same period last year.
  • Net operating cash flow has significantly decreased to $6.71 million or 78.97% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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